Rivoli Part I

1. The markets that Rivoli discusses differ from an idealized, pure market theory in that these markets are not based solely on market supply and market demand. Rather, we have read about numerous types of government involvement that seeks to regulate the market in order to protect the American cotton farmers. In chapter four especially, Rivoli reveals the extent of government protection and how it differs in other countries. In the United States, for instance, the Farm Bill of 2002 brought the cotton farmer’s income up to a minimum of 72.24 cents per pound even though the world price of cotton for the span of years from 2002-2007 was only between 44 and 61 cents. More examples of government protection of cotton farmers in the US is the Crop Disaster Program and Farm Loan Program. Historically throughout the United States’ cotton farming there has been a pattern of diverging from an ideal market economy: plantation slavery, sharecropping, Bracero workers and subsidies. The US government has aided in the suppression of the labor market in the cotton industry to such an extent that Rivoli claims the market is completely absent when it comes to cotton. I think the damaging effects of this aid is best described and summed up in the following excerpt at the end of chapter four: “In US cotton farming, because of the variety of protections in place, disasters happen to cotton but not to people. Nelson Reinsch wasn’t happy to lose his cotton, but he did not lose sleep and he did not miss a meal. . . .  A short time before Nelson Reinsch lost his cotton crop, more than 500 cotton farmers in the Andra Pradesh region of India committed suicide as worms ate the last of their cotton” (73). 
2. From Part I, we have read about many different circumstances of culture interacting with economics. However, one of the most interesting circumstances that stood out to me was how the social culture of West Texas affected the business atmosphere of the cotton industry. For instance, Rivoli notes on page 58 that cotton buyers everywhere preferred west Texan cotton farmers because they were found to be “unfailingly gracious and brimming with hospitality” (58). The friendly and warm culture of Texas improved business relations and made quite the positive difference to the textile mills that cotton farmers worked with. The personal sentiments that the West Texan farmers were able to embed within their business associates added to a greater sense of trust in their cotton. However, the culture of West Texas was certainly not the only reason for textile mill’s preferring their cotton over competitors. Rivoli also mentions the benefits of the USDA classing system. Nevertheless, this is still an example of how the culture/social manner specific to West Texas interacts with economics. 
3. I was very surprised to read about the booming cotton industry in the United States. However, I was more surprised at the great lengths that the government goes to protect the industry and its famers, even in comparison to other type of agricultural industries. For instance, Rivoli states: “Thanks largely to the generous government payments, average annual household income for cotton farmer was $142,463 in 2003 -- approximately double that of non-cotton farmers” (60). I was unaware that farmers made such a significant income and that if varied so widely between industries.